In an attempt to keep a city-imposed delay to just two weeks, Burleigh Triangle developers came equipped with answers for a do-over with a committee Tuesday and earned approval of preliminary plans for their proposed retail complex at Highway 45 and West Burleigh Street.
An attorney, developer and architect pulled up to the table with Community Development Committee members to review details of a revised hard-copy plan of HSA Commercial Real Estate Inc.'s development proposal for the nearly 70-acre parcel.
A key question centered on the project's cost and benefit to the city. Chicago-based HSA expects the first phase – converting 272,800 square feet of warehouses to retail space – will cost the firm up to $45 million.
HSA will fund the entire project initially but is asking the city to create a tax incremental financing district for the site to allow $8.67 million in increased tax revenue generated by the development to cover public infrastructure costs. That request currently is being reviewed by city staff.
Sweetening the pot further, HSA agreed to consider donating up to 1.5 acres of its land to the city for a future fire station. The city currently has a station nearby at 4187 N. Mayfair Rd. that is aging and considered by some as nearing obsolescence.
As the HSA trio outlined new details for the project, several of the 14 conditions the committee required in final plans for the project were addressed. Among them: an outline of how HSA expects to fully develop the site to create a dense, walkable urban development that incorporates higher valued office and residential use.
"The city's goals and HSA's goals are very consistent," said Timothy Blum, HSA's executive vice president and retail division managing director. "We want to maximize the value of our property. If there is a marketplace there, we're going to take advantage of it."
Although the plan's first phases include far more retail space than outlined in the city's 2005 master plan, which calls for up to 240,000 square feet of retail, HSA will keep total retail at the site at 423,200 square feet, said Christopher Thomas, architect for the project with TOA Architects in Evanston, Ill.
In time, and as the market allows, Thomas said, HSA expects to deliver the nearly 1 million square feet of office space targeted for the site in the city‘s master plan, as well as more than 400,000 square feet of residential space.
The revised plan adds office space to a mix of retail fronting on West Burleigh, which helps bump up the potential future office space to 958,200 square feet when fully built out.
The revised plans also show that, in addition to best-in-class retail, HSA is pursuing high-end grocers for the site. Ald. Bobby Pantuso said grocers of interest would be along the lines of Trader Joe's and Whole Foods.
Blum declined to name specific grocers but said the grocery tenants would be high-quality specialty grocers and so would differ from those already in the area. Grocery stores in the city that are closest to the Burleigh Triangle site include a Pick N Save on N. Mayfair Rd. and a Walmart Market planned for 3850 N. 124th St.
The revised plan incorporates ideas heard at the last CDC meeting, as well as comments by city plan commissioners, who approved the preliminary plans and sent it on the CDC in April.
Another condition required by the CDC and addressed Tuesday is that HSA keep the city informed of how it plans to incorporate TLC Logistics, which remains in operation at the center of the HSA site. HSA continues to keep TLC apprised of the development plans, and will continue to operate even as HSA develops several phases, said Brian Randall, HSA‘s attorney with Friebert, Finerty & St. John, S.C., in Milwaukee.
Randall said TLC as well as other warehousing will continue to operate, and HSA will actively maintain the remaining two-thirds of the property until future development occurs.
“For our own interests, we’re not going to let those areas go fallow,” Randall said.
Committee members said the two-week delay was useful, as it allowed HSA to flesh out details needed for them to gain comfort with the plan. That comfort came with roughed out details for HSA’s request for developer-financed TIF funding.
HSA initially will pay for public infrastructure costs through private financing, freeing the city of financial risk. In return, HSA is asking the city to direct TIF dollars its way once the project is completed. Increased tax revenue from the TIF district would be used by HSA to pay off its debt related to public infrastructure costs. Once HSA is reimbursed, the new tax revenue then returns to the city, the school district and other local taxing entities.
HSA has projected the retail complex will generate an additional $900,000 in city tax revenue, or 10 times the $101,810 city tax bill for the property in 2010, based on an assessed value of $4.65 million.
Although TIF financing is not up to the CDC, the issue came up two weeks ago, when committee members put on hold a vote to approve preliminary plans for the retail project. Committee members said they wanted to know the projected benefit for the city, given that TIF funding through the city is likely.
The committee’s recommended preliminary plan approval will go before the Common Council Tuesday. If HSA earns that approval, Blum said, HSA will move as quickly as it can and as quickly as the city approval processes allow. In addition to the council, the preliminary plans also must be reviewed by the city’s design board.
If HSA receives the necessary approvals and financing for the project, HSA has said it could break ground in fall, with the complex to open in spring 2013. HSA estimates retail tenants in the first phase of the project would employ up to 500 part-time and full-time workers.